Raises California’s sales tax to 7.5% from 7.25%, a 3.45% percentage increase over current law. (Under the Brown Tax Hike, the sales tax would have increased to 7.75%)[3][4]

Creates four high-income tax brackets for taxpayers with taxable incomes exceeding $250,000, $300,000, $500,000 and $1,000,000. This increased tax will be in effect for 7 years.[3][5][6]

Imposes a 10.3% tax rate on taxable income over $250,000 but less than $300,000--a percentage increase of 10.6% over current policy of 9.3%. The 10.3% income tax rate is currently only paid by taxpayers with over $1,000,000 in taxable income.[7].

Imposes an 11.3% tax rate on taxable income over $300,000 but less than $500,000--a percentage increase of 21.5% over current policy of 9.3%.

Imposes a 12.3% tax rate on taxable income over $500,000 up to $1,000,000--a percentage increase of 32.26% over current policy of 9.3%.

Imposes a 13.3% tax rate on taxable income over $1,000,000--a percentage increase of 29.13% over current "millionaires tax" policy of 10.3%.

If this proposition is passed in November, 2012, the income tax will apply retroactively to all income earned or received since the first of the year (1 January, 2012).

Based on California Franchise Tax Board data for 2009[8], the additional income tax is imposed on the top 3% of California taxpayers.

Estimated revenue from Proposition 30 vary from Jerry Brown's $9 billion estimate to the $6.8 billion estimated by the non-partisan Legislative Analysts Office (LAO).[9]. The difference stem for the volatility caused by capital gains income from high-income earners, an issue in California's tax system previously identified by the Legislative Analysts Office (LAO).[10]

Title

Summary

The state's official voter guide includes two summaries for each statewide ballot measure. One summary, in bullet-point format, appears in the long-form description of each measure. A shorter form of the summary appears on the ballot label in the front of the voter guide, where there is a short description of each measure.

The long-form summary for Proposition 30 says:

Increases personal income tax on annual earnings over $250,000 for seven years.

Increases sales and use tax by ¼ cent for four years.

Allocates temporary tax revenues 89% to K–12 schools and 11% to community colleges.

Bars use of funds for administrative costs, but provides local school governing boards discretion to decide, in open meetings and subject to annual audit, how funds are to be spent.

Guarantees funding for public safety services realigned from state to local governments.

The short-form (ballot label) summary for Proposition 30 says:

"Increases taxes on earnings over $250,000 for seven years and sales taxes by ¼ cent for four years, to fund schools. Guarantees public safety realignment funding. Fiscal Impact: Increased state tax revenues through 2018–19, averaging about $6 billion annually over the next few years. Revenues available for funding state budget. In 2012–13, planned spending reductions, primarily to education programs, would not occur."

Arguments in favor

"Without Prop. 30, our schools and colleges face an additional $6 billion in devastating cuts this year. Prop. 30 is the only initiative that prevents those cuts and provides billions in new funding for our schools starting this year—money that can be spent on smaller class sizes, up-to-date textbooks and rehiring teachers."

"Prop. 30 is the only measure that establishes a guarantee for public safety funding in our state’s constitution, where it can’t be touched without voter approval. Prop. 30 keeps cops on the street."

"Prop. 30 balances our budget and helps pay down California’s debt—built up by years of gimmicks and borrowing. It is a critical step in stopping the budget shortfalls that plague California."

"To protect schools and safety, Prop. 30 temporarily increases personal income taxes on the highest earners—couples with incomes over $500,000 a year—and establishes the sales tax at a rate lower than it was last year. Prop. 30’s taxes are temporary, balanced and necessary to protect schools and safety."

"Only highest-income earners pay more income tax: Prop. 30 asks those who earn the most to temporarily pay more income taxes. Couples earning below $500,000 a year will pay no additional income taxes."

"All new revenue is temporary: Prop. 30’s taxes are temporary, and this initiative cannot be modified without a vote of the people. The very highest earners will pay more for seven years. The sales tax provision will be in effect for four years."

Donors

Total campaign cashas of October 27, 2012

Support:

$61,800,000

Opposition:

$41,800,000

About $61.8 million has been contributed to the "yes" campaign as of October 27, 2012.

Twenty-two different campaign committees have registered in support of Proposition 30. The main campaign organizations supporting it are:

According to Dan Morain, the state's public employee unions, who could ordinarily be counted on to invest significantly in the campaign to pass Proposition 30, may find themselves torn between donations to support the tax hike, and donations to defeat another measure on the November 6, 2012, ballot, the "Paycheck Protection" Initiative. Morain says, "To help fund the campaign, Brown needs the help of organized labor. But unions will be busy trying to kill a separate initiative promoted by conservatives that would strip them of their ability to raise and spend money on campaigns."[15]

Arguments against

There is no guarantee in the way it is written that the money would be used for schools. Thus, opponents say, it is a "$50 billion shell game." To buttress this argument, opponents quote the California School Boards Association, which in May 2012 said, "the Governor's initiative does not provide new funding for schools."[16]

Instead of supporting education, the new tax money raised by Proposition 30 will really go to "backfill the insolvent teacher's pension fund."[16]

"The Governor, politicians and special interests behind Proposition 30 threaten voters. They say 'vote for our massive tax increase or we'll take it out on schools,' but at the same time, they refuse to reform the education or pension systems to save money."[16]

"Politicians would rather raise taxes instead of streamlining thousands of state-funded programs...look at what they just did: politicians authorized nearly $5 billion in California bonds for the 'bullet train to nowhere', costing taxpayers $380 million a year. Let's use those dollars for schools! Instead, the politicians gave us a false choice -- raise sales taxes by $1 billion per year and raise income taxes on small businesses OR cut schools."

Other arguments that have been made against Proposition 30 include:

The Howard Jarvis Taxpayers Association conducted a "Don't Sign the Petition" campaign, urging people to decline to sign the petition. On their website devoted to encouraging people not to sign the petition, they said, "Petition gatherers may tell you their measure is to increase school funding. But simply put, It’s a Tax Increase! California is already a poorly managed state. We have a $15 billion budget deficit - a result of overspending - $500 billion in unfunded pension liabilities, a tax and regulatory climate that drives businesses away, wasteful and ineffective use of our tax dollars and a political system unduly influenced by special interests. We do NOT need higher taxes. Join us by telling everyone you know not to sign Jerry Brown's tax initiative."[19]

The income tax will be retroactive back to the first of the year (2012), a fundamentally unfair ploy that would not be tolerated if it happened to you as an individual.

The dire "trigger cuts" threatened by proponents are NOT mandated if this measure does not pass. They are NOT automatic. The legislature can choose a number of options to protect and reform education spending if they wish. The touted "trigger cuts" are a political ploy -- nothing more.

Prop 30 funds can free up EXISTING general budget spending on education -- allowing those education funds to then be spent on state worker pay increases, pensions -- and high speed rail to nowhere.

California is already a very high tax state. We already have the 2nd highest state income tax rate, as well as THE highest state sales tax rate. [20][21]

If Proposition 30 is approved, California will be by far #1 in income tax rates. It will be 21% higher than the 2nd highest state (Hawaii), 34% higher than the 3rd highest state (Oregon), and FAR higher than all the rest – including seven states with zero state income tax.[22]

Proposition 30 is opposed by columnist Debra Saunders, who says, "I fear [it will] drive golden geese out of the state. Sure, most families earning $500,000 or more aren't going to move over a lousy $5,000, but moguls who make 20 times that and own multiple homes just might decide to migrate. And there go all their tax dollars."[23]

Some people who generally support tax increases in California say that they have problems with the specifics of Proposition 30. An example of this is Molly Munger, who says, "You sort of hope that the Democrats are the party that stand up for investment in children and in education. Those are two bedrock principles of the Democratic Party. It is a little bit ironic that so many elements of the Democratic Party are, you know, supporting an initiative that does not invest in the main engine we have for social mobility and opportunity in our society, which is our K-12 schools."[24] Another example is columnist George Skelton, who says, "Brown wants voters to believe that all the billions raised by his tax hike would go to K-12 schools and community colleges. They won't. And he knows that as well as anyone."[25]

Molly Munger has additionally said, "Under our proposal, virtually all the cuts that the schools have suffered in the last four years would all be restored—and under the governor's initiative, virtually none would be."[26]

The donors listed in the chart below are the $20,000 and over donors to the "No on 30" campaign as of Saturday, October 27, 2012. Some of these donors gave their money to a committee that is simultaneously supporting or opposing more than one of the ballot propositions on the November 6, 2012, ballot. When that is the case, it is not generally possible to break down how much of that donor's money specifically was spent on the campaign for a particular proposition. Those contributions are listed below with shading; readers should not assume that all or even most of a donation to a multi-purpose committee will be used for expenditures related to this particular proposition.

California tax policies

The following table summarizes the proposed state income tax increases compared to existing tax policy. The table includes the following information:

The starting income for the bottom end of the tax bracket (for single-filer taxpayers)

The income for the top end of the tax bracket (for single-filer taxpayers)

The marginal tax rate for the income bracket under current policy

The new tax rate for the income bracket under the proposed tax hike

The rate increase (proposed_rate - current_rate)

The percentage increase in the rate over current policy ( (proposed_rate - current_rate)/current_rate )

The number of taxpayers that will pay an increased tax rate under the proposed tax hike. These estimates come from 2009 California Franchise Tax Board data.[8] There were 14,638,204 individual income tax payers in 2009. The proposed tax hike affects approximately the top 400,000 taxpayers, about 2.7% of the taxpayer population.

The percentage of taxpayers that will pay more taxes under the proposed tax hike. Again, these estimates come from 2009 California Franchise Tax Board data.[8]

The extra amount owed due to the tax increase for incomes at the bottom end of the tax bracket

The extra amount owed due to the tax increase for incomes at the top end of the tax bracket

"Yes on 30"

The Bay Area Reporter: "We support Prop 30 for several reasons, not the least of which is that it is the product of the political process (although attempts to reach a legislative compromise failed) in which the governor, the Democratic majorities in the Legislature, and affected stakeholders were all part of the negotiations and compromise that resulted in the proposition before the voters."[29]

The Daily Democrat (Woodland, California): "This tax increase is supported by Gov. Jerry Brown and would avoid deep cuts to public schools, community colleges and universities."[30]

The Fresno Bee: "California's fiscal house remains shaky. Prop. 30 offers a way for the state to start climbing out of its pit. It's not ideal. But it is the best available option."[31]

The Lompoc Record: "...a tax increase to avoid calamity for school funding."[32]

The Long Beach Press-Telegram: "Proposition 30 lets our children -- not lawmakers -- off the hook."[33]

The Los Angeles Daily News: "Yes, our schools are being held hostage. The right thing to do is pay up -- and then demand that the reforms begun in Sacramento this year with pension and workers' comp reform continue. Proposition 30 lets our children -- not lawmakers -- off the hook."[34]

The Los Angeles Times: "Two years of belt-tightening have left parts of the state safety net in tatters and pushed college costs out of the reach of many families. Cuts in aid to the poor and working poor in this year's budget eliminated child-care subsidies for 14,000 children and preschool slots for 12,500 children. State aid for low-income seniors and the disabled is now as low as it was in 1983; welfare checks are smaller than they were 25 years ago. And K-12 spending per pupil remains $1,000 less than it was five years ago. California now spends less per student than all but three states."[35]

The Marin Independent Journal: "Passage of Proposition 30 would protect public schools — and our children's educational foundation and opportunities — from being slashed."[36]

The Merced Sun-Star: "Some entities, notably the California School Boards Association, recommends a 'yes' vote on both measures. We think it's more likely voters will support only one, and we think that Proposition 30 is preferable of the two."[37]

The Redding Record Searchlight: "The truth is there's not enough money for the state to do everything its citizens demand. The state frankly overspent straight through the Schwarzenegger administration, even in good years, and now we're at a moment of truth."[39]

The Sacramento Bee: "Gov. Jerry Brown's initiative to raise taxes by $6 billion a year is vital to California's future on many different levels."[40]

The San Bernardino Sun: "California already ranks among the lowest in per-pupil spending. The state's largest school district, Los Angeles Unified, already has the shortest school year in the nation. There's too much at stake to oppose this measure on principle."[41]

The San Francisco Bay Guardian: "And in a state with more billionaires than any other place in America, a fabulously rich place with the world's eighth-largest economy, the notion that we have to argue about raising $6 billion in taxes is farcical."[42]

The San Francisco Chronicle: "The governor and the ruling Democrats in the Legislature have given Californians who care about schools and the current-year deficit only one real choice: support Prop. 30, which would raise taxes on incomes starting at $250,000 for individuals, $500,000 for married couples, and the state portion of the sales tax (now 7.25 percent) by a quarter cent ... Prop. 30 provides a necessary budget patch - especially with the Legislature's Republicans unwilling to consider any tax increases."[43]

The San Gabriel Valley Tribune: "The overall tax burden will still be lower than it was two years ago."[44]

The San Jose Mercury News: "Proposition 30 is no substitute for long-term reforms in education funding, pensions and other areas, but it is a measured and sensible response to this crisis."[45]

The Santa Cruz Sentinel: "Critics of the measure say the governor won't dare administer such cuts. So far, however, we're unaware of any alternative plan for making up the $6 billion."[46]

The Vallejo Times-Herald: "Proposition 30 is no substitute for long-term reforms in education funding, pensions and other areas, but it is a measured and sensible response to this crisis."[47]

The Ventura County Star: "It is a reasonable, well-thought-out approach to an interim fix for the state's recurring deficit, thus giving lawmakers time to seek a long-term solution."[48]

"No on 30"

The Bakersfield Californian: "As desperate as the state is for money, we oppose Prop. 30 because it promotes the same bad budgeting policies that pushed the state into the mess it's in today."[49]

The Contra Costa Times: "Proposition 30 is like taking an Alka-Seltzer for your aching head when you need brain surgery. Sure, the pain might lessen for a while, but the root cause remains. Proposition 30 is not so much a solution as it is a cynical political calculation meant to determine just how much the voters will tolerate. And those voters have had to tolerate a lot recently. While claiming poverty, the Legislature and Gov. Jerry Brown forged ahead with the ill-advised and costly high-speed rail boondoggle."[50]

The North County Times: "The utter failure of Brown to fulfill his primary campaign promise and institute some kind of meaningful public pension reform means that any money raised from Prop. 30 is simply going to feed the beast. For voters to approve Prop. 30 at this time, when no real reform has been passed, would be to reward Sacramento's wasteful, irresponsible behavior."[51]

The Orange County Register: "The tax-and-spend culture in Sacramento needs a complete overhaul. Voters might be agreeable to paying more if they saw true reform, such as freeing families from underperforming public schools with tuition vouchers or enough charter schools to meet demand. Maybe if there were genuine reform to public-sector pensions. Or, if meaningful reform in providing public services could be achieved, rather than merely promised, or, if new spending meant equal reductions in old spending, perhaps voters would have reason to give more. We don't see these reforms ahead. As always, instead, we hear pleas to increase taxes for a broken system those in charge refuse to fix."[52]

The Press-Enterprise: "California would be foolish to raise taxes without providing real and enduring solutions to the state’s chronic budget shortfalls. Yet Props. 30 and 38 would increase taxes on Californians without putting state finances on a sustainable course. Voters should demand a comprehensive fix to the state’s yearly budget turmoil, and reject the flawed half-measures offered by Props. 30 and 38."[53]

The San Diego Union-Tribune: "California voters have a crucial choice this November. On Propositions 30 and 38, they can vote for higher taxes and accept the premise that this won’t hurt the struggling economy and that the main problem with our already-high-tax state is that its government doesn’t get enough money from its residents. Or they can vote no and force change in our broken status quo, starting with the public schools that eat up by far the biggest chunk of the state budget."[54]

The Victorville Daily Press: "Proposition 30 on November's ballot would raise money by increasing the California sales tax by a quarter cent. That doesn't sound like much, until you recall that California’s sales tax rate is already the highest in the United States. Couple that with the fact that the Congressional Budget Office says median U.S. family income has declined more than $4,000 a year since the advent of Obama nearly four years ago, and it’s easy to understand why none of us needs the additional burden. Gov. Jerry Brown argues that the money will go to California’s public schools, but that’s dishonest at best. He wants you to believe that when he says “schools” he means students. He doesn’t; he means teachers’ benefits, mostly pensions."[55]

Polling information

A USC Dornsife/Los Angeles Times poll was conducted from March 14-19, 2012.[56] A PPIC poll was conducted in early April.[57] PPIC also conducted a poll from May 14-20.[58]

A Field Poll conducted in late May indicated declining support.[59] The Sacramento Bee described the results of that poll as "public support for Gov. Jerry Brown's effort to raise taxes hangs precariously above 50 percent, with confidence in Brown slipping."[60]

In August, a poll released Wednesday by the Policy Analysis for California Education (PACE)/USC Rossier School of Education indicated 55% support for Proposition 30.[61]

Uphill climb

According to Joe Mathews of Prop Zero, the initiative faced an uphill climb to get the signatures it needs to qualify for the November ballot.[3] He says:

"The reasons are technical and complicated, but here is a brief summary. The key date to keep in mind is June 28. That's the final day -- 131 days before the election -- for the California Secretary of State to determine whether an initiative has qualified for the ballot. That date is a little more than 3 months away. But the full process takes well more than that. And the reviews and signature gathering need to be completed by early May for the measure to have a real chance.

That will be extremely difficult. Once the initiative is filed, the department of finance and the Legislative Analyst's Office have 25 days to prepare a fiscal impact statement. The attorney general has another 15 days to prepare the title and summary.

Even if the full 40 days aren't required and this politically sensitive measure is fast-tracked, it should be mid-April, at best, by the time this measure hits the streets.

Practically, that could leave less than 3 weeks to collect signatures. Why? Because the signatures must be verified. Counties are supposed to conduct a raw count of the signatures that are turned in by May 2; and by May 11, the Secretary of State must receive those raw counts from the counties and decide whether there are more than enough signatures to qualify."

Cost of signatures

The San Francisco Chronicle reported on March 17 that it might cost as much as $7 million to qualify the measure for the ballot. This is because signature-gatherers are likely to charge much more per signature than they normally would, because of the intense time constraints. The paper also reported that it would be the backers of the Millionaire's Tax who underwrite the expensive signature-gathering effort, while Jerry Brown sits on his campaign warchest in case the expedited signature-gathering effort for the merger initiative fails:

"Who's going to be raising all this money? Apparently Assembly Speaker John Pérez, Senate President Pro Tem Darrell Steinberg and their new partners from the former millionaires tax campaign (namely the California Federation of Teachers and the Courage Campaign). We hear the governor will reserve his war chest for his original tax plan - just in case the new, compromise measure can't get on the ballot."[63]

In early April, it was reported that signature-gatherers were being offered $3.00 per signature.[64]

Direct mail

Supporters of Proposition 30 resorted to the use of direct mail to obtain signatures on the petition. According to columnist George Skelton, in so doing, they were taking a page from "the longtime GOP strategy of mailing ballot-measure petitions directly to voters for their signatures." Recipients of the direct mail package also received a follow-up robocall, asking them to sign and return the petition.[65]

According to Gale Kaufman, "Given the time frame, it seemed a combo of traditional signature-gathering and some mail would give us the quickest and best opportunity to collect signatures."[65]

Proposition 30 on California Choices (sponsored by Next 10, IGS at UC Berkeley, the UC San Diego Political Science Department, the Bill Lane Center for the American West at Stanford, and the Center for CA Studies at Sac State)